What is a club good?

• A. Excludable but non-rival up to capacity.
• B. Non-excludable and non-rival.
• C. Excludable and rival in consumption.
• D. Non-excludable but rival.

Answer: (A)

Club goods are excludable but non-rival in consumption up to a capacity. You can prevent others from using the good by charging a fee or requiring membership, but as long as there is spare capacity, one more user doesn’t meaningfully reduce another’s enjoyment. This makes the good excludable but non-rival until capacity is reached, at which point congestion can make it more rival-like. A typical example is a private club or a toll road with limited capacity.

That’s why the description “excludable and non-rival up to capacity” is the best answer. A pure public good would be non-excludable and non-rival; a good that is excludable and rival in consumption is more like a private good (or a congestible private good) rather than a club good; and a non-excludable but rival description fits a common resource.